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Quote Metrics Calculation Use Cases

This article contains examples of how Zuora calculates quote metrics for the new subscription and amendment quotes.

The Sub-Total (Total - Discount - Tax) of a quote is the invoice amount, and it is calculated based on the following:

The TCV of a quote is calculated solely based on the MRR. The settings above do not affect TCV calculation.

Quote Metrics Calculation Use Case for New Subscription Quote

In the two use cases for New Subscription quotes, the settings are configured as below.

  • Billing Day of the rate plan charge: Default from Customer Account
  • Bill Cycle Day of the quote: 1st of the month
  • Billing Period Alignment of the rate plan charge: Align to Charge
  • When prorating a month, assume 30 days in a month or use actual days: Use actual number of days'
  • When prorating periods greater than a month, prorate by month first, or by day: Prorate by day

Use Case #1 for New Subscription Quote

A quote is created with the following values.

  • Start Date: 10/31/2016
  • Initial Term: 12 months
  • Charge Model of the rate plan charge: Flat Fee
  • Billing Period of the rate plan charge: Month
  • Amount of the rate plan charge: 999.4585400

The quote produces the following quote metrics.

  • Sub-Total: 11,993.52
  • MRR: 999.4585400
  • TCV: 11,993.50

In this use case, the subscription term is 10/31/2016 - 10/30/2017, and Sub-Total and TCV are different by 2 cents

The Sub-Total and TCV are calculated as below.

  • Sub-Total (ie., invoice amount) is the total of the billing periods.
  • Billing Period: 10/31/2016

Since the account's bill cycle day is set to 1st of the month, 10/31/2016 would fall into the month of 10/01/2016 to 10/31/2016.  

The invoice amount for 10/31/2016 = 999.4585400 / 31 days = 32.24

  • 11 Billing Periods: 11/01/2016 - 9/30/2017

The invoice amount for each billing period = 99.4585400 * 1 month = 999.46

  • Billing Period: 10/01/2017 - 10/30/2017

Since the account's bill cycle day is set to 1st of the month, 10/01/2017 - 10/30/2017 would fall into the month of 10/01/2017 - 10/31/2017. 

The invoice amount for 10/01/2017 - 10/30/2017 = 999.4585400 / 31 days * 30 days = 967.22

  • Sub-Total = 32.24 + 999.46 * 11 + 967.22 = 11,993.52
  • TCV is calculated based on the MRR and the subscription term.

TCV =  MRR * subscription term = 999.4585400 * 12 months = 11,993.50

Use Case #2 for New Subscription Quote

The four settings are set as the following.

  • Billing Day of the rate plan charge: Default from Customer Account
  • Bill Cycle Day of the quote: 1st of the month
  • Billing Period Alignment of the rate plan charge: Align to Charge
  • When prorating a month, assume 30 days in a month or use actual days: Assume 30 days in a month
  • When prorating periods greater than a month, prorate by month first, or by day: Prorate by month first

A quote is created with the following values.

  • Start Date: 10/31/2016
  • Initial Term: 12 months
  • Charge Model of the rate plan charge: Flat Fee
  • Billing Period of the rate plan charge: Month
  • Amount of the rate plan charge: 999.4585400

The quote produces the following quote metrics.

  • Sub-Total: 12.026.84
  • MRR: 999.4585400
  • TCV: 11,993.50

In this use case, the subscription term is 10/31/2016 - 10/30/2017, and the Sub-Total and TCV are different by 33.34

The Sub-Total and TCV are calculated as below.

  • Sub-Total (ie., invoice amount) is the total of the billing periods.
  • Billing Period: 10/31/2016

Since the assumption is 30 days per month, the invoice amount for 10/31/2016 = 999.4585400 / 30 days = 33.32

  • 11 Billing Periods: 11/01/2016 - 09/30/2017

The invoice amount for each billing period = would be 999.4585400 * 1 month = 999.46

  • Billing Period: 10/01/2017 - 10/30/2017

Since the assumption is 30 days per month, the invoice amount for 10/01/2017 - 10/30/2017 = 999.4585400 / 30 days * 30 days = 999.46

  • Sub-Total = 33.32 + 999.46 * 11 + 999.46 = 12,026.84
  • TCV is calculated based on the MRR and the subscription term.

TCV =  MRR * subscription term = 999.4585400 * 12 months = 11,993.50

Quote Metrics Calculation Use Case for Amendment Quotes

The settings are configured as below.

  • Billing Day of the rate plan charge: Default from Customer Account
  • Bill Cycle Day of the quote: 13th of the month
  • Billing Period Alignment of the rate plan charge: Align to Charge
  • When prorating a month, assume 30 days in a month or use actual days: Use actual number of days
  • When prorating periods greater than a month, prorate by month first, or by day: Prorate by day

The existing subscription has the following values.

  • Start Date: 03/13/2016
  • Initial Term: 12 months
  • Charge Model of the rate plan charge: Per Unit Pricing
  • Billing Period of the rate plan charge: Month
  • Billing Period Alignment of the rate plan charge: Align to Charge
  • Unit Price of the rate plan charge: 1.00
  • Quantity of the rate plan charge: 75
  • Invoiced for 03/13/2016 to 03/12/2017 for $900

The amendment quote makes these changes.

  • Start Date: 10/26/2016
  • Quantity: 76

The quote produces the following metrics.

  • Sub-Total: 4.60
  • Delta MRR: 1.00
  • Delta TCV: 1.17

The Sub-Total and TCV are calculated as below.

  • Sub-Total (ie., invoice amount) is the total of the billing periods.
  • Billing Period: 10/26/2016 – 11/12/2016
  • Proration credit for the old 75 quantity = -(1.00 * 75) / 31 days * 18 days = -43.5
  • Prorated amount for the new 76 quantity = (1.00 * 76) / 31 days * 18 days = 44.13
  • Billing Period: 11/13/2016 – 03/12/2017
  • Proration credit for the old 75 quantity = -(1.00 * 75) * 4 months = -300
  • Amount for the new 76 quantity = (1.00 * 76) * 4 months = 304
  • Sub-Total = -43.55 + (-300) + 44.13 + 304 = 4.58
  • Delta TCV is calculated based on the Delta MRR and the remaining of subscription term.
  1. Prior to the Update amendment, the charge properties are:
    • Effective Period: 03/13/2016 - 03/12/2017
    • Unit Price: 1.00
    • Quantity: 75
    • MRR = 1.00 * 75 = 75.00
    • TCV = 75.00 * 12 months = 900
  2. After the amendment made on 10/26/2016, the charge properties are:
    • First segment: 03/13/2016 - 10/25/2016 (which is 7 months and 13 days)
      • Unit Price: 1.00
      • Quantity: 75
      • MRR = 1.00 * 75 = 75.00
      • TCV = (75.00 * 7 months) + (75.00 / 31 days * 13 days) = 556.4516129
    •  Second segment: 10/26/2016 - 03/12/2017 (which is 4 months and 15 days
      • Unit Price: 1.00
      • Quantity: 76
      • MRR = 1.00 * 76 = 76.00
      • TCV = (76.00 * 4 months) + (76.00 / 28 days * 15 days) = 344.7142857
  3. Delta TCV = New TCV - Old TCV = (556.4516129 + 344.7142857) – 900 = 1.17
Last modified
11:39, 16 Jan 2017

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